Motley Fool Australia

ASX Stock of the Day: Pointsbet share price surges 77% on NBC deal

cheering sports fans looking at smart phone representing surging pointsbet share price
Image source: Getty Images

The Pointsbet Holdings Ltd (ASX: PBH) share price has surged 77.62% today after the company announced a five year exclusive contract with NBCUniversal. At the time of writing, the Pointsbet share price is trading at $13.41 after closing yesterday’s session at $7.55. Under the contract, Pointsbet will become the official sports betting partner of NBC Sports in the United States. The partnership provides access to leading national and regional television and digital assets, with the largest sports audience of any US media company. 

What does Pointsbet do? 

Pointsbet is a corporate bookmaker operating in Australia and the US. The company has developed a scalable, cloud-based wagering platform through which it offers sports and racing wagering products. The partnership with NBC serves to accelerate Pointbet’s strategy to leverage the US sports betting and iGaming markets.

How has the Pointsbet share price been performing? 

The company reported strong growth across KPIs in FY20, which has seen the Pointsbet share price increase more than 1,000% from a March low of $1.19 to its current level. Turnover increased 103% to $1,152 million in FY20, while active client numbers increased 39% to 111,4000. Net revenues reached $75.2 million, up from $25.6 million in FY19. The Australian trading business delivered positive earnings before interest, taxes, depreciation and amortisation (EBITDA) for FY20 after only three years of operation and continued expansion in the US. 

Pointsbet’s US business 

Investors have been piling into the Pointsbet share price as the company has secured key partnerships with major US sports teams including the Detroit Tigers, Indiana Pacers, Colorado Avalanches, Denver Nuggets and Colorado Mammoths. In FY20, Pointsbet launched online operations in Iowa and Indiana, and had licenses approved for Illinois and Colorado. iGaming is preparing for launch in Michigan, New Jersey and West Virginia. The deal with NBCUniversal is expected to be transformational and drive significant financial benefits. 

The US online sports betting market is estimated to be worth $27 billion and is growing rapidly. The US iGaming market is estimated to be worth $30 billion at maturity. Growth in this market will be driven by the NBC partnership, which gives Pointsbet exclusive rights to promotional enhancements and integrations on television and digital platforms. 

Pointsbet CEO, Sam Swanell, said:

NBC Sports, an iconic brand and holder of the largest sports audience in the US, brings significant credibility and trust to Pointsbet’s operations. Through the NBC Sports partnership, Pointsbet gains access to market-leading broadcast assets which span 184 million viewers and digital assets which span 60 million monthly active users. These assets will act as the cornerstone of our marketing strategy and ….will deliver outstanding client acquisition and retention efficiency as we scale rapidly over the next five years. 

Forget what just happened. We think this stock could be Australia's next MONSTER IPO...

One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting...

Because 'Doc' Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget 'buy now pay later', this stock could be the next hot stock on the ASX.

Returns as of 6th October 2020

Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Related Articles...

Kate O'Brien
Latest posts by Kate O’Brien (see all)